Bank of Montreal is reporting stronger profit for the fourth-quarter ended October 31. The bank says the increase was driven by lower provisions for bad loans, better cost controls and stronger revenues.

The bank says net profit was $513 million, or 97¢a share, for the quarter up from $398 million, or 75¢, a year ago.

Stripping out one-time items, quarterly earnings were $1 per share.

Provisions for bad loans in the quarter fell to $95 million from $160 million one year ago, while return on equity climbed to 17.9% from 14.6%

Quarterly revenue rose 5% to $2.41 billion, but would have climbed by 10% if not for the rising Canadian dollar, the bank says.

Looking ahead, the bank has set a 2004 full-year earnings-per-share target of 10% 15% growth.

The bank is also targetting 2004 loan loss provisions at $500 million or less, and return on equity between 16% and 18%.

For the year, net income was $1,825 million, up $408 million or 29% from a year ago.

“BMO’s strong fourth quarter results wrapped up a very successful year,” said Tony Comper, chairman and CEO, in a news release. “Income was up sharply and we achieved all of our financial targets. Results were higher in all of our operating groups and they each improved their cash productivity ratio by more than 150 basis points, our number one priority for the year. These successes were reflected in a 33% total shareholder return for 2003.”

Revenue for the year increased $412 million, or 5%, to $9,271 million, as growth was solid in all operating groups.

The bank says Personal and Commercial Client Group revenue rose on continued strong volume growth across all products in Canada and the United States, although the U.S. growth was offset by the effect of the decline in the Canadian/U.S. dollar exchange rate.

In Canada, growth was primarily in the personal segment, led by retail deposits, card services and residential mortgages.

Private Client Group revenue rose on improving market fundamentals and stronger performance in direct and full-service investing and investment products.

Investment Banking Group results rose on stronger income trust origination activity and higher trading revenue. The incremental effects of acquired businesses and lower investment securities losses also contributed to BMO’s revenue increase, while the lower Canadian/U.S. dollar exchange rate curtailed growth by 3%.

The bank also declared a quarterly dividend of 35¢ a share.